IN NEWARK, A CONDOMINIUM FOR LAW FIRMS

By ANTHONY DePALMA

Published: June 17, 1984

Development Corporation are preparing to develop an 18-story, 400,000-square foot condominium office building on the Passaic River near the Pennsylvania Railroad Station in downtown Newark.

Space in the building - the Newark Legal and Communications Center - will be sold to law firms, in many cases to keep those in the city from relocating to the suburbs, as several have done over the last few years. The Port Authority is prepared to spend as much as $40 million to develop the building, which will be linked by fiber optics to the agency's communications teleport facility in Staten Island.

The financial commitment was a quid pro quo for allowing the agency to raise bridge and tunnel tolls and PATH fares last year. In exchange for the approval of the increases by the Governors of New York and New Jersey, the agency agreed to put up an office building in downtown Newark and committed itself to other development projects in both states.

The $40 million from the Port Authority is expected to cover most of the costs of building the office tower. The city, through the semi-autonomous Economic Development agency, has applied to the Federal Department of Housing and Urban Development for a $10.9 million Urban Development Action Grant to build a 450-car underground parking garage and a pedestrian walkway spanning busy Raymond Boulevard between the new building and the railroad station.

This project is the first phase of an ambitious attempt to reclaim a broad stretch of abandoned or underutilized land along the Passaic River. The city's riverfront master plan calls for a total of three office buildings at the 12-acre site, bounded by Raymond Boulevard, McCarter Highway and the river, as well as a new business hotel and the adaptive reuse of an old power station owned by the Public Service Electric & Gas Company. So far, only the condominium tower has reached the financing stage.

The riverfront redevelopment will be linked by elevated pedestrian walkways to the train station into the hotel and three new office buildings that already make up Newark's successful downtown redevelopment project, known as Gateway.

''The law center is extremely important, but not just for the waterfront development,'' said George A. Weinkam, vice president of Renaissance Newark, a civic and business group dedicated to fostering the city's revitalization. ''It also will set the tone for the rest of the development we hope to see in downtown Newark.''

Two years ago, Renaissance Newark commissioned a study of downtown Newark that identified the riverfront as a valuable development site where new construction would be economically feasible. The study was conducted by the American City Corporation, a subsidiary of the Rouse Company, developer of waterfront projects in Boston and Baltimore and at the South Street Seaport in Manhattan.

Armed with the study, Newark officials presented a riverfront development plan to the Port Authority, which so far has enthusiastically agreed to participate.

''We seem to have hit on something very positive here,'' said Cornelius J. Lynch, deputy director of the World Trade Center in Manhattan, which is handling the development for the Port Authority. ''We've already had enough interest from the law firms that we've talked to to sell out the whole building now.'' Under the arrangement worked out for the project, the Newark Economic Development Corporation will buy a 2.8-acre parcel of land from the city's Housing and Redevelopment Agency and build a parking garage, using $8 million of the grant money.

The city will retain ownership of the garage and will lease the space above it to the Port Authority for construction of the 18- story tower. The rest of the grant money will be used to build a walkway and to widen Raymond Boulevard by 12 feet.

Preliminary plans for the project, drawn by the Grad Partnership of Newark, show a building with a roughly triangular shape, imposed by site restrictions and the placement of underground utility lines. The building will be designed with the needs of medium-sized to large law firms in mind and will offer many cost-sharing services that, the developers believe, will entice Newark's law firms to stay in Newark.

''For the past 100 years, Newark has been the center of the legal practice in northern New Jersey,'' Mr. Lynch said. ''But over the last four to five years, some have moved out and virtually every firm we've talked to has said they have considered a move to the suburbs.''

MR. LYNCH said the building would allow the firms to ''practice law more efficiently,'' by offering services such as shared conference and library facilities, as well as the telecommunications system and the attached parking garage. In addition, there are considerable tax advantages for a firm that owns its own space. The city has agreed to give the project a property- tax abatement, which will be prorated to each firm on the basis of its square foot percentage of the overall building.

Alfred L. Faiella, executive director of the Newark Economic Development Corporation, said the city hoped to attract firms from the surrounding municipalities back to Newark, while holding those already in the city.

But what Newark is not looking for, according to Mr. Faiella, is any footloose firms from New York City. Earlier this year, approval of a $40 million grant to Jersey City for its waterfront development was in jeopardy until its Mayor agreed that no New York companies would be allowed to take space in new office buildings.

Mr. Faiella said the delicate political question of interstate rivalry arose when Federal officials initially reviewed Newark's application. ''But unlike Jersey City's project,'' he said, ''we're not geared to getting New York clients.''

While the rivalry issue is not expected to hinder approval of the grant, city officials nonetheless are concerned because they say the Federal Government has cut back its funds, at a time when many more applications have been filed.

''We've been successful with UDAG so far,'' Mr. Faiella said, counting up more than $30 million in grants the city has received. ''But without this grant, the building won't be built.''

The Port Authority's commitment is contingent on the city's receiving the Federal grant. The Federal housing agency will make its decision next month.